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GIFT AID - for single and regular gifts
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the Cathedral can now recover tax paid by donors on gifts of any amount. |
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apart from completing a Gift Aid Declaration, no additional paperwork is necessary. |
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one declaration covers all subsequent donations and can be canceled at any time. |
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while the principle of covenant giving remains, completing a Deed of Covenant for regular gifts is no longer necessary. |
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a regular gift, arranged through a Standing Order, is eligible for Gift Aid, e.g. a gift of £20/month over 3 years, with tax reclaimed will result in a gift of £878. |
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higher rate taxpayers can claim the difference between basic and higher rate tax. Thus, for a higher rate taxpayer, a gift of £1,000 will be worth about £1,282 to the Cathedral through Gift Aid, while only 'costing' you £770. |
PAYROLL GIVING - tax-free giving direct from your pay with a 10% bonus
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through your employer you may give regularly to charity directly from your salary. |
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contributions are deducted from your pay before tax. |
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the Government will contribute an additional 10% to all payroll gifts for the next 3 years. |
SHARES and SECURITIES
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you are not only exempt from Capital Gains Tax for gifts of certain shares and securities, but can also gain relief from income tax (up to 40%) on the market value of your shares. |
LEGACIES
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the Cathedral can be named as a beneficiary or residuary in your will. |
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bequests are exempt from inheritance tax. |
For more information read the article below kindly donated by Dr. David Forrester (August 2000)
The Government has announced substantial and important changes to charity taxation. Gifts of shares to charities will qualify for income tax relief. This will extend to unit trusts and unlisted shares and securities dealt with on a recognised stock exchange. This is in addition to existing CGT reliefs, but the charity cannot reclaim tax on the gift.
Gifts by non-residents will qualify under the revised gift aid rules, providing that they have UK tax liabilities to "cover" the gift. VAT exemption is to be further extended for fund raising events. This was announced in the November 1999 statement and is now to be widened, to take in regular small-scale events and rather larger ones.
The more general changes announced last November came into effect in April 2000 and included:
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the abolition of the £250 minimum for Gift Aid donations. There are also some changes to the rules on what benefits donors can receive from the charity without infringing the Gift Aid rules. |
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consolidating the relief for covenant gifts into Gift Aid. |
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removal of the need for a Gift Aid certificate, to be replaced by a more flexible declaration. But an audit trail will still be necessary. The timing of this declaration will not be crucial and it can cover a number of donations. It can be in writing, electronic or oral form. There is no standard form, but they can be approved. Oral declarations must lead to the charity sending a written record of the declaration. |
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removal of the need for donors to pay income tax at the basic rate equal to the deemed tax deduction. Any tax equivalent to the deduction will now qualify (including capital gains tax). |
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allowing companies to make Gift Aid donations gross, preventing the need for the charity to reclaim tax. |
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abolition of the payroll giving limit of £1,200 per annum. |
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payment of a 10% supplement on payroll giving donations. |
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introduction of a new tax exemption for charities that carry on small trading and fund raising activities. |
It should be noted that there is a considerable amount of guidance available on all of this (at least as regards the charity) from the Inland Revenue.
Alan Barr, Director, Legal Practice Unit, University of Edinburgh, and Consultant, Brodies Solicitors.
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